Consumers usually perceive higher-priced products as ________.

31) Consumers usually perceive higher-priced products as ________.

A) being in the maturity stage of the product life cycle

B) having a higher quality

C) having low profit margins

D) popular brands

E) being in the introductory stage of the product life cycle

Answer:  B

Diff: 2        Page Ref: 320

Skill:  Concept

Objective:  11-3

32) Consumers are less likely to use price to judge the quality of a product when they ________.

A) lack information

B) lack skills to use the product

C) have experience with the product

D) are shopping for a specialty item

E) cannot physically examine the product

Answer:  C

Diff: 2        Page Ref: 320

Skill:  Concept

Objective:  11-3

33) Which of the following refers to the prices that a buyer carries in his or her mind and refers to when looking at a given product?

A) target prices

B) reference prices

C) promotional prices

D) geographical prices

E) dynamic prices

Answer:  B

Diff: 1        Page Ref: 320

Skill:  Concept

Objective:  11-3

34) When consumers cannot judge quality because they lack the information or skill, price becomes ________.

A) less important

B) insignificant

C) an important quality signal

D) the only driver of the purchase

E) negotiable

Answer:  C

Diff: 2        Page Ref: 320

Skill:  Concept

Objective:  11-3

35) All of the following are typical ways a buyer might form a reference price EXCEPT ________.

A) noting current prices

B) remembering past prices

C) assessing the buying situation

D) identifying perceived value

E) being influenced by sellers

Answer:  D

Diff: 2        Page Ref: 320

Skill:  Concept

Objective:  11-3

36) What type of pricing is being used when a company temporarily prices its product below the list price or even below cost to create buying excitement and urgency?

A) segmented pricing

B) psychological pricing

C) referent pricing

D) promotional pricing

E) basing-point pricing

Answer:  D

Diff: 1        Page Ref: 321

Skill:  Concept

Objective:  11-3

37) Promotional pricing can have all of the following adverse effects EXCEPT ________.

A) creating deal-prone customers

B) eroding the brand's value in the eyes of customers

C) giving pricing secrets away to competitors

D) becoming addictive to both the customer and business

E) delaying the company's focus on long-term strategies

Answer:  C

Diff: 2        Page Ref: 321

Skill:  Concept

Objective:  11-3

38) In a form of promotion pricing, customers buy products from manufacturers' dealers within a specified time period, and then the manufacturer sends the customer a check called a ________.

A) cash rebate

B) discount

C) dealer reduction

D) promotional pricing reward

E) discount allowance

Answer:  A

Diff: 2        Page Ref: 321

Skill:  Concept

Objective:  11-3

39) Low-interest financing and longer warranties are both examples of ________.

A) segmented pricing

B) promotional pricing

C) allowances

D) discounts

E) product-form pricing

Answer:  B

Diff: 3        Page Ref: 321

Skill:  Concept

Objective:  11-3

40) Which of the following is NOT a geographical pricing strategy?

A) FOB-origin pricing

B) zone pricing

C) dynamic pricing

D) uniform-delivered pricing

E) basing-point pricing

Answer:  C

Diff: 2        Page Ref: 322

Skill:  Concept

Objective:  11-3

41) Durango China Company charges all customers within different identified geographical areas a single total price. The more distant the area, the higher the price. This is ________.

A) freight-absorption pricing

B) zone pricing

C) uniform-delivered pricing

D) FOB-origin pricing

E) bulk rate pricing

Answer:  B

Diff: 2        Page Ref: 322

Skill:  Concept

Objective:  11-3

42) Under which type of geographic pricing strategy does each customer pay the exact freight for the product from the factory to its destination?

A) zone pricing

B) basing-point pricing

C) uniform-delivered pricing

D) FOB-origin pricing

E) dynamic pricing

Answer:  D

Diff: 2        Page Ref: 322

Skill:  Concept

Objective:  11-3

43) Using this pricing strategy, the seller takes responsibility for part or all of the actual freight charges in order to get the desired business.

A) FOB origin

B) freight-absorption

C) basing-point

D) loss leader

E) zone

Answer:  B

Diff: 1        Page Ref: 323

Skill:  Concept

Objective:  11-3

44) Which of the following is the opposite of FOB-origin pricing?

A) basing-point pricing

B) freight-absorption pricing

C) uniform-delivered pricing

D) freight-absorption pricing

E) zone pricing

Answer:  C

Diff: 3        Page Ref: 322

Skill:  Concept

Objective:  11-3

45) Freight-absorption pricing is used for ________ and ________.

A) market penetration; higher profit margins

B) holding on to increasingly competitive markets; higher profit margins

C) market penetration; holding on to increasingly competitive markets

D) generating temporary higher profits; discouraging competitors

E) services; installations

Answer:  C

Diff: 3        Page Ref: 323

Skill:  Concept

Objective:  11-3